                                 CODE OF VIRGINIA

LOANS TO LOCAL GOVERNMENTS OR OTHER ENTITIES (§ 62.1-238)

Money in the Fund shall be used solely to make loans or loan subsidies to local
governments or other entities to finance or refinance the cost of any project or
to establish or fund an endowment fund to assist in the cost of any project. The
local governments or other entities to which loans or loan subsidies are to be
made, the purposes of the loan or loan subsidy, and the amount of each such loan
or loan subsidy, the interest rate thereon and the repayment terms and those
public health conditions deemed necessary by the Board thereof, which may vary
between loan recipients, shall be designated in writing by the Board to the
Authority following consultation with the Authority. No loan or loan subsidy
from the Fund shall exceed the total cost of the project to be financed or the
outstanding principal amount of the indebtedness to be refinanced plus
reasonable financing expenses.
		Except as set forth above, the Authority shall determine the terms and
conditions of any loan or loan subsidy from the Fund, which may vary between
local governments or other entities. Each loan shall be evidenced by appropriate
bonds, notes, or agreements of the local government or other entity payable to
the Fund. The bonds or notes shall have been duly authorized by the local
government or other entity and executed by its authorized legal representatives.
The Authority is authorized to require in connection with any loan or loan
subsidy from the Fund such documents, instruments, certificates, legal opinions
and other information as it may deem necessary or convenient. In addition to any
other terms or conditions which the Authority may establish, the Authority may
require, as a condition to making any loan or loan subsidy from the Fund, that
the local government or other entity receiving the loan or loan subsidy covenant
to perform any of the following:

A. Establish and collect rents, rates, fees and charges to produce revenue
sufficient to pay all or a specified portion of (i) the costs of operation,
maintenance, replacement, renewal and repairs of the project; (ii) any
outstanding indebtedness incurred for the purposes of the project, including the
principal of and premium, if any, and interest on the loan from the Fund to the
local government or other entity; and (iii) any amounts necessary to create and
maintain any required reserve, including any rate stabilization fund deemed
necessary or appropriate by the Authority to offset the need, in whole or part,
for future increases in rents, rates, fees or charges;

B. With respect to a local government, levy and collect ad valorem taxes on all
property within the jurisdiction of the local government subject to local
taxation sufficient to pay the principal of and premium, if any, and interest on
the loan or loan subsidy from the Fund to the local government;

C. Create and maintain a special fund or funds for the payment of the principal
of and premium, if any, and interest on the loan or loan subsidy from the Fund
to the local government or other entity and any other amounts becoming due under
any agreement entered into in connection with the loan or loan subsidy, or for
the operation, maintenance, repair or replacement of the project or any portions
thereof or other property of the local government or other entity, and deposit
into any fund or funds amounts sufficient to make any payments on the loan or
loan subsidy as they become due and payable;

D. Create and maintain other special funds as required by the Authority; and

E. Perform other acts, including the conveyance of, or the granting of liens on
or security interests in, real and personal property, together with all rights,
title and interest therein, to the Fund, or take other actions as may be deemed
necessary or desirable by the Authority to secure payment of the principal of
and premium, if any, and interest on the loan or loan subsidy from the Fund and
to provide for the remedies of the Fund in the event of any default in the
payment of the loan or loan subsidy, including, without limitation, any of the
following:

   1. The procurement of insurance, guarantees, letters of credit and other forms
   of collateral, security, liquidity arrangements or credit supports for the
   loan or loan subsidy from any source, public or private, and the payment
   therefor of premiums, fees or other charges;

   2. The combination of one or more projects, or the combination of one or more
   projects with one or more other undertakings, facilities, utilities or
   systems, for the purpose of operations and financing, and the pledging of the
   revenues from such combined projects, undertakings, facilities, utilities and
   systems to secure the loan or loan subsidy from the Fund made in connection
   with such combination or any part or parts thereof;

   3. The maintenance, replacement, renewal and repair of the project; and

   4. The procurement of casualty and liability insurance.
   				All local governments or other entities borrowing money from the Fund are
   authorized to perform any acts, take any action, adopt any proceedings and
   make and carry out any contracts that are contemplated by this chapter. Such
   contracts need not be identical among all local governments or other entities,
   but may be structured as determined by the Authority according to the needs of
   the contracting local governments or other entities and the Fund.
   				Subject to the rights, if any, of the registered owners of any of the
   bonds of the Authority, the Authority may consent to and approve any
   modification in the terms of any loan or loan subsidy subject to guidelines
   adopted by the Board.

HISTORY: 1987, c. 324; 1997, cc. 651, 665.